2011-02-14 09:00:12 CET
2011-02-14 09:00:47 CET
REGULATED INFORMATION
Aspo - Financial Statement Release
ASPO GROUP'S FINANCIAL STATEMENT RELEASE
Aspo Plc STOCK EXCHANGE RELEASE February 14, 2011 at 10.00 a.m.
ASPO GROUP'S FINANCIAL STATEMENTS RELEASE
ASPO 2010: operating profit grew considerably
(comparative figures are for 2009)
- Aspo Group's net sales in January-December grew by 20% and amounted to EUR
395.9 million (EUR 329.4 million)
- Comparable operating profit grew by 49% to EUR 17.9 million (comparable
operating profit EUR 12.0 million plus EUR 3.3 million in non-recurring items)
- Profit before tax was EUR 14.1 million (EUR 8.4 million plus EUR 3.3 million
in non-recurring items)
- Earnings per share was EUR 0.40 (EUR 0.16 and non-recurring sales gains of EUR
0.17 as earnings per share)
- Operational cash flow was EUR 0.37 per share.
ASPO October-December 2010: strong end of the year
- Aspo Group's net sales grew by 21% and amounted to EUR 109.1 million (EUR
90.1 million)
- Operating profit grew by 38% and was EUR 5.5 million (EUR 4.0 million)
- Earnings per share stood at EUR 0.13 (EUR 0.10).
- The Board of Directors proposes a dividend of EUR 0.42 per share to the Annual
Shareholders' Meeting (EUR 0.42).
Guidance for 2011
- In 2011, Aspo has the preconditions to increase its net sales and improve its
earnings per share.
KEY FIGURES
1-12/ 1-12/
2010 2009
Net sales, MEUR 395.9 329.4
Operating profit, MEUR 17.9 15.3
Share of net sales, % 4.5 4.6
Profit before taxes, MEUR 14.1 11.7
Share of net sales, % 3.6 3.6
Personnel at the end of period 712 717
Earnings per share, EUR 0.40 0.33
EPS adjusted for dilution, EUR 0.41 0.33
Comparable earnings per share, EUR 0.16
Equity per share, EUR 2.63 2.59
Equity ratio, % 33.2 34.6
Gearing, % 101.5 87.9
AKI OJANEN, ASPO'S CEO:"Aspo generated a good operating result in 2010. We clearly improved our net
sales and operating profit. We have been successful in the integration and
business operation development after the 2008 acquisition.
The beginning of 2010 was challenging. In the first quarter, the low demand and
high costs caused by difficult ice conditions in the winter weakened the result.
Good development from the second quarter onwards took us towards our goal as a
conglomerate; net sales and cash flow were distributed more evenly across
different business areas. Currently Aspo is a true conglomerate. Our most
profitable business area, ESL Shipping, represents half and the other businesses
combined represent the other half of our operating profit. We reached our goal
in cutting the Group's administrative costs. Our goal in the future is to
continue improving the Group administration's cost ratio to operating profit.
The comparable earnings per share excluding non-recurring sales gains increased
from EUR 0.16 to EUR 0.40. Despite our ship investment program, our equity ratio
and gearing remained nearly at last year's level.
Since 2007, we have published our quarterly development in our strategic focus
areas of Russia and the Ukraine. We were once again able to raise our net sales
and profitability considerably in these markets. Aspo's goal in the future is to
continue growing through well thought-out acquisitions and investments.
The personnel survey carried out in late 2010 showed that our personnel like
their work and appreciate Aspo as a company. I would like to thank our personnel
in all of our fourteen operating countries for the good work and result in
2010."
ASPO AS A COMPANY
Aspo is a conglomerate that owns and develops business operations in northern
Europe and growth markets, focusing on demanding B-to-B customers. Aspo's strong
company brands - ESL Shipping, Leipurin, Telko and Kaukomarkkinat - aim to be
the market leaders in their sectors. They are responsible for their own
operations, customer relationships, and the development of these. Together they
generate Aspo's goodwill. Aspo's Group structure and business operations are
continually developed without any predefined schedules.
Aspo's operating segments are ESL Shipping, Leipurin, Telko and Kaukomarkkinat.
Other operations include Aspo Group's administration and other operations not
belonging to the business units.
The Group monitors its net sales on the basis of the following geographical
division: Finland, the Nordic countries, the Baltic countries, Russia and other
CIS countries (including the Ukraine), and other countries.
OPERATIONAL PERFORMANCE
General uncertainty decreased on the markets and the prices of raw materials
sold stabilized. The transportation volumes of raw materials important to Aspo
increased.
In Aspo's operating areas, national economies and purchasing power have
improved. General uncertainty in the financial markets continued, and it is
still difficult to estimate future developments.
The EU commission continues to handle the tonnage tax. Our financial statement
does not include a possible change to the tonnage tax legislation that would be
applied retrospectively to the 2010 financial statements.
ESL Shipping
ESL Shipping is the leading dry bulk sea transport company operating in the
Baltic Sea area. At the end of the review period, the company's fleet consisted
of 15 vessels, of which the company owns 12. ESL Shipping is an integral part of
of the Finnish energy and steel industry's security of supply.
10-12/2010 10-12/2009 Change 2010 2009
Net sales, MEUR 19.9 17.6 2.3 79.5 63.8
Operating profit, MEUR 3.0 3.6 -0.6 11.5 14.7
Personnel 183 194 -11 183 194
The shipping company's operating environment was challenging in early 2010. The
difficult ice conditions increased costs, which weakened operating profit in the
first quarter.
ESL Shipping exceeded last year's net sales level, but operating profit was
below the 2009 level, which included a EUR 2.9 million non-recurring sales gain
from m/s Kontula.
The cargo volumes for the steel industry were normal in 2010 and increased
considerably from 2009. The cargo volume carried by ESL Shipping in January-
December amounted to 13.1 million tons (10.7). Steel industry's share of the
volume was 9.1 million tons (5.7). The cargo volume in the energy industry was
below last year's and the forecasted amounts. The energy industry's share was
3.3 million tons (4.5). The cargo volume carried in October-December amounted to
3.4 million tons (3.0). The share of the steel industry was 2.3 million tons
(1.9), and the energy industry represented 0.8 million tons (0.9). The
international recession decreased sea freight prices, which exceptionally
increased long-distance imports of coal and affected ESL Shipping's coal cargo
volumes in 2010.
The shipping company time charted m/s Princenborg until June 2010 and m/s
Nassauborg and m/s Beatrix throughout the entire year. The time chartering of
the two latter vessels continues until the summer of 2011. The 18,800 dwt vessel
ordered from India was named m/s Alppila and will be completed in the spring of
2011. Two 56,150 dwt ice-strengthened dry cargo supramax class vessels have been
ordered from the Korean Hyundai Mipo's Vinashi shipyard. The first vessel will
possibly be completed already this year and the other in the spring of 2012.
When the new vessels are completed, the shipping company's capacity will grow by
50 percent.
Leipurin
Leipurin serves the baking and food industry by supplying ingredients,
production machinery, and production lines, as well as related expertise.
Leipurin operates in Finland, Russia, Poland, the Baltic countries, the Ukraine,
Belarus, and Kazakhstan. In Russia, Leipurin has operations in several large
cities in addition to St. Petersburg and Moscow. Procurement operations are
international.
10-12/2010 10-12/2009 Change 2010 2009
Net sales, MEUR 30.6 27.5 3.1 108.7 99.3
Operating profit, MEUR 1.4 1.1 0.3 3.6 3.2
Personnel 226 218 8 226 218
The raw material prices in the food industry decreased in the first half of
2010, and made an upturn in the fall due to a global increase in the demand for
agricultural products.
Leipurin reached record net sales and operating profit in 2010. The last quarter
was the best of the year. The growth in net sales and operating profit was in
particular due to an increase in bakery raw material sales in Russia's new
offices.
Leipurin is the market leader in Finland and in all the Baltic countries. The
share of Russia, the Ukraine and the CIS markets was approximately 22% of
Leipurin Group's total net sales in 2010.
The operations and profitability in bakery raw material sales developed well.
Business operations were launched in Kazakhstan and Belarus in late 2010. Due to
a low order book in early 2010, the operating profit from the machinery
department was clearly below last year's result. Some of the project deliveries
for bakery production lines agreed on in the summer were delivered in the fourth
quarter and the rest will be delivered in 2011. Other food business operations
showed moderate growth.
Telko
Telko is the leading expert and supplier of industrial chemicals and plastic raw
materials in the Baltic Sea region. It operates in Finland, the Baltic
countries, Scandinavia, Poland, the Ukraine, Russia, Belarus, Kazakhstan, and
China. Procurement operations are international. Business is based on
representation by the best international principals and on the expertise of the
personnel. Telko develops the production and competitiveness of its customers'
products in cooperation with them.
10-12/2010 10-12/2009 Change 2010 2009
Net sales, MEUR 47.9 33.7 14.2 175.2 128.8
Operating profit, MEUR 1.7 -0.1 1.8 6.8 3.1
Personnel 199 193 6 199 193
Telko's operating environment improved considerably compared to 2009. The result
was affected both by price increases in sold raw materials and a recovery in
demand from 2009.
Telko reached record net sales and operating profit in 2010. The 2009 operating
profit included a EUR 3.2 million non-recurring sales gain from the divestment
of Hamina Terminal Services Oy's operations and EUR 2.3 million in non-recurring
costs from storage loss and reorganization.
The restructuring that started in 2009 continued by shifting to an operational
organization that supports cost-efficient operational growth in the future. The
considerable net sales and operating profit growth in 2010 is proof of
successful changes and cost efficiency.
Investments in new principals' products and in improving the service for key
customers were particularly visible as considerable growth in the plastics
business. Investments were made in growth markets by launching operations in
Kazakhstan and Belarus, by establishing operations in the metropolises of
Yaroslavl, Samara and Nizhny Novgorod in Russia and by launching operations in
China. The share of Russia, the Ukraine and CIS countries was EUR 63.5 million
(36.8) of total net sales in 2010.
In Finland and Scandinavia, Telko implemented a new ERP system in 2010.
Kaukomarkkinat
Kaukomarkkinat specializes in energy efficiency technology, solutions to improve
efficiency in the process industry, and security and digital products.
Operations are based on the products of the best companies in the industry and
the willingness of the company's own experts to improve the operations and
efficiency of its customers. Kaukomarkkinat operates in Finland, Poland, Russia,
China, and Vietnam.
10-12/2010 10-12/2009 Change 2010 2009
Net sales, MEUR 10.7 11.3 -0.6 32.5 36.4
Operating profit, MEUR 0.8 0.5 0.3 0.6 0.5
Personnel 91 90 1 91 90
In 2010, Kaukomarkkinat's net sales and comparable operating profit decreased.
The 2009 operating profit included a non-recurring EUR -0.5 million sales loss
from a divestment. The fourth quarter operating profit amounting to EUR 0.8
million (0.5) was the best for the year. In the last quarter, Finnish local
energy and electronics operations improved their result considerably. Towards
year-end, the order book of industrial product deliveries improved, but net
sales and profitability decreased from the 2009 level.
Some Chinese project deliveries were completed in the fourth quarter. At the
beginning of the year, the sales and profitability of energy efficiency products
was weak due to a harsh winter and decreased demand. The test success in heating
and energy efficiency of Panasonic's air heat pumps represented by
Kaukomarkkinat, the product expansion in the fall through the acquisition of
KSM-Lämpötekniikka's operations to pellet plants, and solar energy increased
sales in the second half of the year.
In Finland, Kaukomarkkinat implemented a new ERP system at the beginning of
2011.
Other operations
Other operations include Aspo Group's administration and other operations not
belonging to the business units.
10-12/2010 10-12/2009 Change 2010 2009
Net sales, MEUR 0.0 0.0 0.0 0.0 1.1
Operating profit, MEUR -1.4 -1.1 -0.3 -4.6 -6.2
Personnel 13 22 -9 13 22
NET SALES
Aspo Group's net sales grew by EUR 66.5 million or 20.2% to EUR 395.9 million
(329.4).
Net sales by segment, MEUR
10-12/10 10-12/09 Change 2010 2009
ESL Shipping 19.9 17.6 2.3 79.5 63.8
Leipurin 30.6 27.5 3.1 108.7 99.3
Telko 47.9 33.7 14.2 175.2 128.8
Kaukomarkkinat 10.7 11.3 -0.6 32.5 36.4
Other operations 0.0 0.0 0.0 0.0 1.1
Total 109.1 90.1 19.0 395.9 329.4
There is no considerable inter-segment net sales.
Net sales by market area, MEUR
10-12/10 10-12/09 Change 2010 2009
Finland 46.4 38.8 7.6 167.1 151.8
Nordic countries 12.4 9.6 2.8 51.9 30.0
Baltic countries 12.6 9.2 3.4 43.8 37.0
Russia +other CIS countries 25.2 18.0 7.2 88.5 56.2
Other countries 12.5 14.5 -2.0 44.6 54.4
Total 109.1 90.1 19.0 395.9 329.4
Net sales grew strongly in Russia, the Ukraine and the CIS countries. The net
sales in this market area grew by 40% in the fourth quarter compared to the
previous year and amounted to EUR 25.2 million (18.0). At full year level, net
sales growth in the market area was 57%.
When ESL Shipping's raw material exports from Russia are included in the net
sales figures, the importance of the area is emphasized further in Aspo's
business operations. Calculated like this, the share of the market area of
overall net sales is nearly 30%.
MEUR 10-12/10 10-12/09 Change 2010 2009
Russia + other CIS countries 31.3 23.9 7.4 112.0 87.9
EARNINGS
Aspo Group's operating profit for the period was EUR 17.9 million (15.3). The
operating profit does not include any non-recurring costs or income. The 2009
operating profit included EUR 6.1 million in sales gains, EUR -0.5 million in
sales losses, and non-recurring costs from reorganization and storage losses in
Telko of EUR 2.3 million.
ESL Shipping's operating profit was EUR 11.5 million (EUR 11.8 million, plus EUR
2.9 million sales gain from m/s Kontula). Leipurin's operating profit was EUR
3.6 million (3.2). Telko's operating profit grew by EUR 3.7 million to EUR 6.8
million (EUR 3.1 million including non-recurring costs of EUR 2.3 million and a
non-recurring sales gain of EUR 3.2 million from Hamina Terminal Services'
operations). Kaukomarkkinat's operating profit was EUR 0.6 million (EUR 0.5
million including a sales loss of EUR -0.5 million from Metex Deutschland).
Other operations include Aspo Group's administration and a small share of other
items not belonging to the business units. The operating profit of other
operations was negative, and amounted to EUR -4.6 million (-6.2). Administration
costs have decreased considerably since the fourth quarter in 2009.
Operating profit by segment, MEUR
10-12/10 10-12/09 Change 2010 2009
ESL Shipping 3.0 3.6 -0.6 11.5 14.7
Leipurin 1.4 1.1 0.3 3.6 3.2
Telko 1.7 -0.1 1.8 6.8 3.1
Kaukomarkkinat 0.8 0.5 0.3 0.6 0.5
Other operations -1.4 -1.1 -0.3 -4.6 -6.2
Total 5.5 4.0 1.5 17.9 15.3
Earnings per share
Earnings per share was EUR 0.40 (0.33) and diluted earnings per share was EUR
0.41 (0.33). Equity per share was EUR 2.63 (2.59).
INVESTMENTS
Group investments amounted to EUR 13.2 million (7.4) which mainly consists of
ESL Shipping's advance payments for the vessels that are being built and docking
of existing vessels. Other investments include the purchase of the Group's ERP
system and maintenance investments.
Investments by segment, acquisitions excluded, MEUR
10-12/10 10-12/09 Change 2010 2009
ESL Shipping 0.6 0.2 0.4 11.1 3.1
Leipurin 0.1 0.1 0.0 0.3 0.5
Telko 0.2 1.6 -1.4 0.9 2.5
Kaukomarkkinat 0.4 0.2 0.2 0.8 0.6
Other operations 0.0 0.1 -0.1 0.1 0.7
Total 1.3 2.2 -0.9 13.2 7.4
FINANCING
The Group's financing position remained unchanged during the year. The 2010
financing position was affected by the good profitability and strong operational
cash flow, as well as the new vessel investments. For its part, the 2009
financial position was affected by considerable capital gains from business
operation and vessel deals, as well as compensation from the cancellation of a
vessel order from India.
The Group's liquidity was good and the amount of cash and cash equivalents on
the closing date was EUR 7.1 million (11.5). There was a total of EUR 77.7
million (70.3) in interest-bearing liabilities on the consolidated balance sheet
on the closing date. Interest-free liabilities totaled EUR 65.7 million (57.6).
Aspo Group's gearing was 101.5% (87.9) and the equity ratio was 33.2% (34.6).
The Group's cash flow from operations still remained strong. The Group reached a
good operating profit level but working capital was tied up in operational
growth. The cash flow for January-December was EUR 9.6 million (13.0). At the
end of the period the change in working capital stood at EUR -8.5 million (6.8).
The Group's free cash flow was EUR -1.8 million (33.9). ESL Shipping's first
payments for the vessel investments lowered free cash flow in 2010.
The amount of binding revolving credit facilities signed between Aspo and its
main financing banks stood at EUR 50 million (80) at the end of the period. At
the end of the period, the binding revolving credit facilities remained fully
unused. Aspo has a EUR 50 million commercial paper program of which EUR 5
million was in use at the end of the period. ESL Shipping signed a EUR 25
million credit agreement as part of the overall financing of approximately EUR
30 million of the first supramax vessel ordered from the Korean Hyundai Mipo's
Vinashi shipyard.
Convertible capital loan
Aspo Plc has EUR 12,200,000 in a convertible capital loan issued in 2009. The
loan period is June 30, 2009 - June 30, 2014. The loan will be repaid in one
installment on June 30, 2014, assuming that the repayment conditions outlined in
Chapter 12 of the Finnish Companies Act and the loan terms are met. The loan has
a fixed interest rate of 7%.
The loan units can be converted into Aspo shares. Each EUR 50,000 subscription
of the loan entitles the loan unit holder to convert the loan unit into 7,690
Aspo Plc shares. The conversion rate is EUR 6.50. The loan can be converted
annually between January 2 and November 11. The conversion period ends on June
15, 2014. During 2010, 430,640 new shares were subscribed with 56 loan units.
Related party loans
Aspo Plc has granted a EUR 2.8 million loan to Aspo Management Oy, one of the
company's related parties and controlled by the company, as part of a new
shareholding plan for the Group. The interest of the loan receivable is 3%. The
loan receivable falls due on March 31, 2014 and it can be extended to March
31, 2016 at the latest. Aspo Plc's shares are used as collateral. The company
has been consolidated in the financial statements. The loan is market-based.
RISKS AND RISK MANAGEMENT
During 2010 the economic recession began to turn around slowly which lowered the
risk levels in all sectors. The risks caused by the recession have been closely
monitored in Aspo throughout the year and the materialization of the main risks
has been prevented through different measures.
At the Group level, strategic risks are decreased by the fact that business
operations are divided into four sectors and operations are carried out in a
wide geographical area. Operative risks have decreased and the likelihood of
materialization is lower, but the changes in the market as an aftermath to the
recession are constantly monitored. Quick positive changes in financial
structures could also cause risks, as the customer or principal structure or
technologies could change, and possibilities that require fast reaction could go
unutilized. The recognition and handling of strategic and operative risks has
been centralized in Aspo thanks to the establishment of an audit committee in
April 2010.
Aspo is growing in developing market areas where growth risks are also affected
by industrial and commercial investments, interest rate levels, exchange rates
and customers' liquidity, as well as changes in legislation and import
regulations. Consumer behavior is also reflected in the risks generated through
B-to-B customers and the risk levels. Industrial demand in Western countries has
improved as the economy has recovered and risk levels have decreased in general.
The demand changes in emerging markets show a similar trend, but these changes
are more difficult to predict.
The Group has avoided considerable exchange rate losses due to active hedging of
currency positions and currency flow. Credit loss risks have stabilized, but as
an aftermath of the recession we still keep a close eye on our customers. The
most significant credit loss provision made in the last quarter of 2009 was
dissolved as the situation normalized in 2010.
The risks caused by the aftermath of the economic recession were monitored
closely in Aspo. The business areas still continued carrying out risk analyses
controlled by external assessors and making continuity plans. In order to ensure
insurance coverage, the company reviewed the potential amounts of operating
risks and loss risks, and made necessary corrections to the amount insured.
One of the tasks of the audit committee established by Aspo's Board of Directors
is to monitor the efficiency of the Group's internal supervision, internal
audits and risk management systems. The audit committee monitors the risk
management process and carries out necessary measures in particular to prevent
strategic risks. In accordance with the internal supervision principles approved
by the Board of Directors in 2009, risk management is part of Aspo's internal
supervision and its task is to ensure the implementation of the Group's
strategy, development of financial results, shareholder value, dividend payment
ability, and continuity in business operations. The operational management of
the business areas is responsible for risk management. The management is
responsible for defining sufficient measures, implementation, and for monitoring
and ensuring that the measures are implemented as part of day-to-day operational
control. Risk management is coordinated by Aspo's CFO, who reports to the Group
CEO.
The goodwill reflects the performance ability of each sector with capital
employed, and the related risks are monitored with sector-specific impairment
testing at least annually. In 2010, there was no need to make changes to
goodwill.
CORPORATE GOVERNANCE
From October 1, 2010, Aspo has applied the Finnish Corporate Governance Code
2010 issued by the Securities Market Association.
PERSONNEL
At the end of the period, the number of employees at Aspo Group was 712 (717)
and the average during the fiscal period was 736 (723). The average number of
officials during the year was 497 (492) and of employees was 239 (231). The
number of personnel in the parent company consisting of officials was 12 (12) at
the end of the period and 12 (15) on average during the period.
Of Aspo Group's personnel, 54% (59) work in Finland, 4% (4) in other Nordic
countries, 10% (10) in Baltic countries, 22% (18) in Russia and other CIS
countries, and 10% (9) in other countries. Men make up 62% (64) and women 38%
(36) of employees. Of Aspo Group's employment contracts, 99% (99) are full time.
During the financial year, 83 (30) new employment contracts were signed. The
cost of all employment benefits within Group in 2010 amounted to EUR 34.3
million (36.4).
Personnel by segment, year-end
10-12/2010 10-12/2009 Change
ESL Shipping 183 194 -11
Leipurin 226 218 8
Telko 199 193 6
Kaukomarkkinat 91 90 1
Other operations 13 22 -9
Total 712 717 -5
Rewarding
Aspo Group has a profit bonus system. Part of the Group's profit is paid as a
profit bonus to the personnel fund. The aim is that the personnel fund uses the
majority of the profit bonuses to purchase Aspo Plc shares. The long-term goal
is that the personnel will become a considerable shareholder group in the
company. All persons working at Aspo Group's Finnish subsidiaries are members of
the personnel fund. Aspo's business areas pay part of their earnings as bonuses
to the personnel. The calculation principals for the bonuses are decided on by
business area.
In 2009, Aspo's Board decided to continue the 2006 management shareholding
program by granting the people included in the plan the possibility to receive
Aspo shares in the spring of 2010. On March 25, 2010, the Board decided to
transfer 43,130 Aspo shares held by the company to employees included in the
shareholding program.
In addition, in 2009 Aspo's Board of Directors made a decision on a shareholding
program for the Group's key personnel. The potential gain is based on
continuation of the key employees' employment relationships and Aspo Group's
cumulative Earnings per Share indicator (EPS) in 2009-2011. The potential gain
will be paid partly in Aspo shares and partly in cash between January and March
2012. The management shareholding program encompasses about 40 persons in Aspo's
management and key personnel.
On October 26, 2010, the Board of Aspo decided on a new shareholding plan for
the management of Aspo Group. The purpose of the plan is to enable considerable
long-term ownership in Aspo for those involved in the plan. For the
shareholding, the participants acquired a company called Aspo Management Oy,
whose entire stock they own. Aspo Management Oy acquired 114,523 Aspo shares
from the participants at market price and Aspo also assigned 322,637 shares at
EUR 7.93 per share to the company in a directed share issue. As part of the
arrangement, the Board decided to grant Aspo Management Oy a EUR 2,800,000
interest-bearing loan to finance the share purchase. The plan is valid until the
spring of 2014, when it will be dissolved in a manner that will be decided on
later. The plan will be extended for one year at a time if the share price of
Aspo at the beginning of 2014, 2015 or 2016 is below the average price at which
Aspo Management Oy acquired the Aspo shares it owns. There are restrictions on
the right of disposal of the shares for the duration of the plan. The
participants' holding in Aspo Management Oy will principally remain valid until
the system is dissolved.
RESEARCH AND DEVELOPMENT
Aspo Group's R&D focuses mainly on developing operations, procedures and
production technology without a separate organization, which means that the
development investments are included in normal operational costs and are not
itemized.
ENVIRONMENT
Aspo Group's regular operations do not have any significant environmental
impact. The Group companies follow Aspo's environmental policy with the main
principle of continuously improving operations. Throughout its operations, Aspo
supports the principles of sustainable development.
Aspo looks after the environment by taking initiatives and continuously
monitoring the laws and recommendations connected to its operation and any
revisions to these. Aspo wants to be a pioneer in all of its operations and also
anticipates future developments in environmental regulations.
MANAGEMENT AND AUDITORS
Aspo Plc's Annual Shareholders' Meeting on April 7, 2010 re-elected Matti
Arteva, Esa Karppinen, Roberto Lencioni, Gustav Nyberg, Kristina Pentti-von
Walzel, and Risto Salo to the Board of Directors for a one-year term. Gustav
Nyberg has acted as the full-time Chairman of the Board and Matti Arteva as the
Vice Chairman.
In its meeting after the Shareholders' Meeting, the Board decided to form an
Audit Committee and elected Roberto Lencioni as the Chairman of the Committee
and Kristina Pentti-von Walzel and Risto Salo as Committee members.
In 2010, the Board of Directors arranged ten meetings, of which three were
teleconferences. The average participation rate was 99%.
eMBA Aki Ojanen has acted as the CEO of the company.
The authorized public accounting firm PricewaterhouseCoopers Oy has been the
company's auditor. Mr. Jan Holmberg, APA, has acted as the auditor in charge.
BOARD AUTHORIZATIONS
The 2010 Annual Shareholders' Meeting authorized the Board to use funds included
in distributable profit to repurchase a maximum of 500,000 company shares. The
shares will be purchased through public trading, which means that the purchase
will be made irrespective of the shareholders' holdings and the price paid for
the shares will be the market price of Aspo's shares at the time of the
acquisition. The authorization does not exclude the Board's right to decide on a
directed issue.
The shares will be acquired to finance and complete any acquisitions or other
transactions, for the balancing of the financial risk in the company's share-
ownership program, or for other purposes to be decided on by the Board of
Directors.
The Board may not exercise the authorization if, after the acquisition, the
company or its subsidiary were to possess or have as a pledge more than 10% of
the company's stock.
The Board of Directors has not utilized the authorizations granted for the
acquisition of company-held shares in 2010.
The Annual Shareholders' Meeting also authorized the Board of Directors to
decide on a share issue, through one or several installments, by treasury
shares. An aggregate maximum amount of 1,120,000 shares may be conveyed on the
basis of the authorization. The shares will be used to finance and complete any
acquisitions or other transactions, to carry out the company's share-ownership
program, or for other purposes to be decided on by the Board of Directors.
The authorization includes the right for the Board to decide on the terms and
conditions applicable to the share issue, and thus also the right to decide on a
directed share issue deviating from the shareholders' pre-emptive right on
conditions laid down by law.
The authorizations are valid until the Annual Shareholders' Meeting of 2011, but
no more than 18 months from the approval at the Shareholders' Meeting.
Based on the authorization by the 2010 Annual Shareholders' Meeting, the Board
decided on a share issue directed at Aspo Management Oy, which is a company
owned by Aspo Group's management. In the issue, 322,637 of Aspo's own shares
were transferred as part of the share ownership plan for Aspo Group's
management. The transfer price of the shares was EUR 7.93 per share.
In addition, the Board decided based on the authorization by the 2009 Annual
Shareholders' Meeting to transfer 43,130 Aspo shares held by the company to
employees included in the 2006 share-ownership program.
SHARE CAPITAL AND SHARES
Aspo Plc's share capital on December 31, 2010, was EUR 17,691,729.57, and the
total number of shares was 26,836,703, of which the company held 254,233 shares,
i.e. 0.95% of the share capital. Aspo Plc has one share series. Each share
entitles the shareholder to one vote at the shareholders' meeting. Aspo's share
is quoted on NASDAQ OMX Helsinki Ltd's medium-sized companies group under
industrial products and services.
During 2010, a total of 5,144,587 Aspo Plc shares were traded at EUR 38.7
million or 19.2% of the shares changed owners. During the period, the stock
reached a high of EUR 8.31 and a low of EUR 5.91. The average share price was
EUR 7.44 and the closing price at year-end was EUR 8.26. At the end of the
financial year, the market capitalization excluding treasury shares was EUR
219.6 million.
At the end of the period, the number of Aspo Plc shareholders was 5,760. A total
of 681,444 shares, or 2.5% of the total share capital, were nominee registered
or held by non-domestic shareholders.
EVENTS AFTER THE FINANCIAL YEAR
ESL Shipping Ltd has signed a new, long-term contract with Rautaruukki
Corporation for the marine transport of raw materials on the Baltic Sea.
DIVIDEND PROPOSAL
The Board of Directors proposes to the 2011 Annual Shareholders' Meeting that a
dividend of EUR 0.42 per share will be paid for the financial year that ended on
December 31, 2010, and that no dividend is to be paid on the Aspo shares held by
the company.
OUTLOOK FOR 2011
Aspo Group's current structure creates a good basis for operational growth. The
Group seeks organic growth in particular in Russia and other CIS countries, as
well as in the Ukraine and China. The business units also seek growth through
acquisitions.
Aspo's aim is to improve its operating profit margin.
Aspo has the preconditions to increase its net sales and improve its earnings
per share.
ESL Shipping
The shipping company's capacity will grow thanks to m/s Alppila which will be
completed this spring in India and a supramax vessel that will possibly be
completed before year-end. Several vessels will be docked in 2011. In order to
ensure winter traffic and dockings, the time charters of m/s Beatrix and m/s
Nassauborg will continue until next summer, for the time being. A considerable
share of the transportation capacity of 2011 has been covered with long-term
agreements. Cargo volumes in the steel industry are expected to reach 2010
levels and cargo volumes in the energy sector will grow further from 2010
levels.
The change to the tonnage legislation that has been handled at the EU commission
since the beginning of 2010 would, if applied, have a considerable effect on ESL
Shipping's result after tax, and if investments are materialized in the balance
sheet, it would have a non-recurring effect on the profit for the period.
Leipurin
Organic growth is expected to continue. During 2011, Leipurin will continue its
establishment in emerging markets and will further develop its new units in
Kazakhstan, Belarus and the Ukraine. The new offices create a good foundation
for several years of growth in bakery raw material sales. Bakery machine sales
are expected to surpass last year's level. The launch of raw material sales to
the other food industry (meat, dairy and soft drink industry) outside Finland
that began in 2010 is expected to have a positive effect on net sales and
profitability in 2011.
Telko
Telko's current cost efficiency and expansion to new principals and new market
areas create a good basis for continued profitable growth in 2011. The company
will continue expanding in Russia, the Ukraine and the CIS countries, in
accordance with its strategy. Additional new offices will be opened in major
cities in Russia. The new units established in China, Kazakhstan and Belarus in
2010 will expand their operations.
Kaukomarkkinat
During 2011, Kaukomarkkinat will expand its operations in local energy solutions
where solar energy equipment as inexhaustible sources of energy, pellet boilers
and plants as renewable energy solutions, and water, air and ground heat source
pumps as energy efficient solutions become emphasized. In Finnish electronic
operations, the product selection and services in data, AV and security products
are developed. The order book for Far East project sales is higher than last
year.
Operational risks
The general economic situation is affecting industrial demand in northern Europe
and the growth markets. It is difficult to foresee whether the growth in demand
in Aspo's market areas will continue, or whether there will be any other sudden
changes in business preconditions. Changes in the financial markets and in the
value of currencies may have an effect on the Group's future profit development.
A more detailed account of the risk management policy and the main risks has
been published in the 2009 annual report and on the company's website. More
detailed information on financing risks can be found in the notes to the
financial statements.
Helsinki, February 14, 2011
ASPO Plc
Board of Directors
ASPO GROUP INCOME STATEMENT
10-12/10 10-12/09
MEUR % MEUR %
Net sales 109.1 100 90.1 100
Other operating income 0.5 0.5 3.2 3.6
Depreciation and write-downs -2.0 -1.8 -2.1 -2.3
Operating profit 5.5 5.0 4.0 4.4
Financial income and expenses -0.8 -0.7 0.0 0.0
Profit before taxes 4.7 4.3 4.0 4.4
Profit for the period 3.4 3.1 2.5 2.8
Other comprehensive income
Translation differences 0.6 0.4
Cash flow hedges 0.6 0.9
Net result recoqnized directly to equity 0.2
Income tax on other comprehensive income -0.2 -0.3
Other comprehensive income for the year, net of taxes 1.0 1.2
Total comprehensive income 4.4 3.7
Profit attributable to shareholders 3.4 2.4
Non-controlling interest 0.0 0.1
Total comprehensive income attributable to shareholders 4.4 3.6
Non-controlling interest 0.0 0.1
1-12/10 1-12/09
MEUR % MEUR %
Net sales 395.9 100.0 329.4 100.0
Other operating income 1.5 0.4 10.5 3.2
Depreciation and write-downs -8.1 -2.0 -8.9 -2.7
Operating profit 17.9 4.5 15.3 4.6
Financial income and expenses -3.8 -1.0 -3.6 -1.1
Profit before taxes 14.1 3.6 11.7 3.6
Profit for the period 10.4 8.6
Other comprehensive income
Translation differences 1.2 -0.1
Cash flow hedges -0.9 0.4
Net result recoqnized directly to equity 0.2
Income tax on other comprehensive income 0.2 -0.1
Other comprehensive income for the year, net of taxes 0.5 0.4
Total comprehensive income 10.9 9.0
Profit attributable to shareholders 10.3 8.5
Non-controlling interest 0.1 0.1
Total comprehensive income attributable to shareholders 10.8 8.9
Non-controlling interest 0.1 0.1
ASPO GROUP BALANCE SHEET 12/10 12/09 Change
MEUR MEUR %
Assets
Non-current assets
Intangible assets 15.9 16.6 -4.2
Goodwill 40.6 40.2 1.0
Tangible assets 54.4 50.1 8.6
Available-for-sale assets 0.2 0.2 0.0
Long-term receivables 1.3 0.6 116.7
Shares in associated companies 1.7 1.6 6.2
Total non-current assets 114.1 109.3 4.4
Current assets
Inventories 44.9 29.3 53.2
Sales and other receivables 46.7 44.7 4.5
Cash and bank deposits 7.1 11.5 -38.3
Total current assets 98.7 85.5 15.4
Total assets 212.8 194.8 9.2
Shareholders' equity and liabilities
Shareholders' equity
Share capital 17.7 17.7 0.0
Other shareholders' equity 51.1 49.2 3.9
Shareholders' equity attributable to equity holders of the
parent 68.8 66.9 2.8
Non-controlling interest 0.7 0.0 0.0
Long-term liabilities 78.5 57.1 37.5
Short-term liabilities 64.8 70.8 -8.5
Total shareholders' equity and liabilities 212.8 194.8 9.2
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
A = Share capital F = Translation difference
B = Premium fund G = Retained earnings
C = Fair value fund H = Total
D = Other funds I = Non-controlling interest
E = Repurchased shares J = Total shareholders' equity
MEUR A B C D E F G H I J
Balance at
31.12.2009 17.7 4.3 0.0 2.8 -3.7 -1.6 47.4 66.9 0.1 67.0
Comprehensive income:
Profit for the period 10.3 0.1
Translation difference 1.2
Cash flow hedge, net of taxes -0.7
Total comprehensive income -0.7 1.2 10.3 10.8 0.1
Transactions with owners:
Dividend payment -10.8
Share based payment 0.3 0.1 0.0
Conversion of convertible bond 2.3
Share repurchase -0.9
Non-controlling interest 0.6
Total transactions with owners 2.6 -0.8 -10.8 -9.0 0.7
Balance at
31.12.2010 17.7 4.3 -0.7 5.4 -4.5 -0.4 46.9 68.7 0.8 69.5
Balance at
31.12.2008 17.7 4.3 -0.3 0.5 -3.7 -1.5 49.0 66.0 0.0 66.0
Comprehensive income:
Profit for the period 8.5 0.1
Translation difference -0.1
Cash flow hedge, net of taxes 0.3
Net result recoqnized directly
to equity 0.2
Total comprehensive income 0.3 -0.1 8.7 8.9 0.1
Transactions with owners:
Dividend payment -10.8
Share based payment 0.5
Equity share of convertible
bond,net of taxes 2.3
Total transactions with owners 2.3 -10.3 -8.0
Balance at 31.12.2009 17.7 4.3 0.0 2.8 -3.7 -1.6 47.4 66.9 0.1 67.0
ASPO GROUP CASH FLOW STATEMENT
1-12/10 1-12/09
MEUR MEUR
OPERATIONAL CASH FLOW
Operating profit 17.9 15.3
Adjustments to operating profit 8.3 1.7
Change in working capital -8.5 6.8
Interest paid -4.8 -5.5
Interest received 1.2 0.2
Taxes paid -4.5 -5.5
Total operational cash flow 9.6 13.0
INVESTMENTS
Investments in tangible and
intangible assets -11.9 -3.8
Gains on the sale of tangible and intangible assets 0.6 13.8
Gains on the sale of business operations 11.1
Purchases of subsidiary shares -1.2
Purchases of business operations -0.3
Associated companies acquired 0.2
Sale of the subsidiary shares 1.0
Total cash flow from investments -11.4 20.9
FINANCING
Change in short-term borrowings -14.9 -32.7
Change in long-term borrowings 24.0 8.5
Share repurchase -0.9
Dividends paid -10.8 -10.8
Total financing -2.4 -35.0
Increase / Decrease in liquid funds -4.4 -1.1
Liquid funds in beginning of year 11.5 12.6
Liquid funds at period end 7.1 11.5
KEY FIGURES AND RATIOS
2010 2009
Earnings per share, EUR 0.40 0.33
EPS adjusted for dilution, EUR 0.41 0.33
Comparable earnings per share, EUR 0.16
Equity per share, EUR 2.63 2.59
Equity ratio, % 33.2 34.6
Gearing, % 101.5 87.9
ASPO GROUP CONTINGENT LIABILITIES 2010 2009
MEUR MEUR
Securities on group liabilities 68.7 72.4
Leasing liabilities 45.9 16.9
Derivative contracts 0.8 0.7
ACCOUNTING PRINCIPLES AND FINANCIAL REPORTING
Aspo Plc's interim report has been compiled in accordance with the principles of
IAS 34 Interim Financial Reporting. The same accounting principles have been
adopted in the interim report as in the Financial Statements on December
31, 2009. The calculation formulas for key indicators are explained on page 82
of the 2009 financial statements. The information in this report is unaudited.
Helsinki February 14, 2011
ASPO Plc
Aki Ojanen Arto Meitsalo
CEO CFO
For more information:
Aki Ojanen, +358 9 521 4010, +358 400 106 592
aki.ojanen@aspo.com
PRESS AND ANALYST CONFERENCE
A press and analyst conference will be arranged today, Monday February 14, 2011
at 14.00 at the Gallen-Kallela cabinet at Hotel Kämp, Pohjoisesplanadi
29, 00100 Helsinki.
ANNUAL SHAREHOLDERS' MEETING
The Aspo Plc Annual Shareholders' Meeting is scheduled to be held on Tuesday,
April 5, 2011, at 14:00 in the Stock Exchange Building at Fabianinkatu
14, 00100 Helsinki.
FINANCIAL INFORMATION IN 2011
The 2010 Annual Report will be published during week 13 in Finnish, in English
and in Swedish. You can read and order the report on our website atwww.aspo.com.
Aspo Plc will publish three Interim Reports in 2011: for the first quarter on
May 3, 2011, for the second quarter on August 18, 2011, and for the third
quarter on October 26, 2011.
DISTRIBUTION:
NASDAQ OMX Helsinki
Key media
www.aspo.com
[HUG#1488411]
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